New Delhi, October 5
Prime Minister Atal Behari Vajpayee today hinted at a tough reforms agenda involving difficult decisions aimed at pitchforking the economy on a sustained high-growth trajectory of 8 per cent during the Tenth Plan period.

“The issue before us is not whether we can achieve a significantly higher growth rate, rather it is whether we can afford not to”, Mr Vajpayee said during his opening remarks at the meeting of the Full Planning Commission here today.

Detailing out the reforms agenda, the Prime Minister said the difficult decisions could not be avoided to achieve the desired rate of growth.

He said a lower target of the growth rate could not be afforded by the country “if we want to move towards our cherished dream of building an India free of poverty, illiteracy and homelessness, free of regional, social and gender disparities”.

Indicating further reforms on the tax front, he said that “tax reforms will have to be accelerated. We must quickly move towards integrated central and state value added taxation system”.

Underlining the need for fiscal prudence by both Centre and states, the Prime Minister said :”We have to squeeze maximum efficiency and productivity on every rupee of investment already made. Specifically we must utilise excess capacity effectively, upgrade existing capital assets, reduce public sector dissavings and remove all non-financial barriers to speedier development”.

On foreign direct investment (FDI), Mr Vajpayee allayed fears that the government was pursuing a policy that would adversely affect the domestic industry.

“Let there be no worry in any quarter that we would follow such an FDI policy as would weaken the Indian industry or hurt the national interest,” he said adding that “this will never happen.”

The draft Tenth Plan, clearly envisages that majority of the investible funds for achieving 8 per cent growth will have to come from domestic savings and the foreign investment can only supplement the domestic savings.

Expressing concern over the “very slow” pace of power sector reforms, the Prime Minister said there could be no further delay in the “removal of bottlenecks in our energy-transport—and-water infrastructure”.

“One of the principal reasons why our current growth rate is stagnating at around 5.5 per cent is due to severe infrastructural bottlenecks”, he said.

Mr Vajpayee said reforms in governance was essential to yield the maximum output of economic reforms. “In the economic sphere the primary aim of these governance reforms will have to be greater encouragement to private entrepreneurship, with the government strengthening its role in the formulation and implementation of policies, legislation, regulation, and facilitation and exiting from direct participation in production and distribution”, he said .

The Prime Minister said the Draft Tenth Five Year Plan addresses the concerns of India’s developmental needs. It lays emphasis on speeding up the development of agriculture, agro-industries, small-scale and cottage industries and the whole array of activities in the informal sector, Mr Vajpayee said.

Seeking the cooperation of all political parties, social organisations, voluntary agencies and the media to achieve the higher rate of growth, he said, “Only when we are able to make development a people’s movement and the Tenth Plan a people’s plan”.

“In addition, we must ensure that the range of legal impediments faced by the unorganised sector are quickly removed”, Mr Vajpayee said while complimenting the Planning Commission for drafting a “formidable document”.

Deputy Chairperson of the Planning Commission K.C. Pant said India has the potential of executing a major economic turnaround in a short span of time.